2018 FIFA WC: Amazing things awaits for the fans in Russia

FIFA World Cup will be a massive money spinner for Russia.

XtraTime Web Desk: FIFA World Cup will be a massive money spinner for the organising nation Russia. betting firms, pub chains and sportswear brands that will benefit from the associated global spending surge.

The world’s biggest sporting event is unlikely to make or break companies but it gives them the chance to reach new customers and showcase new products, potentially locking in revenue streams beyond the end of the month-long tournament that kicks off next week in Russia.

This year’s tournament will add $2.4 billion to the global advertising market, according to marketing agency Zenith.

“For brands, the World Cup offers a unique opportunity to reach these consumers at scale, during shared public occasions they are emotionally involved in,” said Jonathan Barnard, Zenith’s director of global intelligence.

The tournament is expected to have a broadcast audience of 3.5 billion across the globe.

Investment banks are busy sending clients their World Cup research identifying which shares could win big. The tone is often light and some tips to be taken with a pinch of salt as they piggyback the marketing bonanza.

Brokers also know that investors will themselves be busy watching the games, keeping trading volumes light.

Studies, including from the European Central Bank have shown that trading volumes drop significantly during World Cup matches with the biggest plunges just after goals and other key moments in a game.

Monthly volumes for Brazil’s benchmark Bovespa equities index reached a two-year low during the last World Cup in June 2014 according to Reuters data.

One certain bet is that beer will be drunk in large quantities to celebrate victories or drown sorrows.

Volumes of beer typically get a 2-3 percent boost in host countries during a World Cup year, Morgan Stanley analysts found looking at the four previous hosts.

Carlsberg, the market leader in Russia and Budweiser maker ABInBev, a global sponsor, look to be among the winners from this tournament.

ABInBev has said it expects the World Cup to boost annual sales volumes in finalists Brazil and Argentina by 0.5 to 1 percentage point, thanks to matches driving beer drinking in the normally drier winter months.

“We think the best final to maximise the positive impact for ABInBev would be Brazil vs. Mexico,” Morgan Stanley analysts wrote.

A spike in consumption around the event likely helped Heineken and ABInBev shares – which are highly exposed to Latin America – outperform peers during 2014’s World Cup in Brazil.

In Britain, pub operators such as Greene King are also likely winners even though progress to the last eight would be seen as an achievement for a young England team.

Morgan Stanley found the pub chain’s sales growth jumped by 3.5 percent during the Euro 2016 when the “Three Lions” suffered a disappointing loss against Iceland during the knock-out stage.

The World Cup also usually fuels gambling, with UK-listed bookmakers such as GVC or Paddy Power Betfair seen as good bets, particularly if England do well.

“A strong showing from England will keep interest and hopes high, and the further the national team progresses, the more punters are likely to bet with their hearts rather than their heads,” Laith Khalaf, a senior analyst at Hargreaves said.

The world’s biggest sportswear brands are also vying for dominance on the field with Nike supplying shirts for 10 countries, including Brazil, France and England.

Chi Chan, who oversees investments in euro zone stocks for Hermes Investment Management, has chosen to invest in Nike’s arch-rival Adidas as it spends big to try to retain its leading position in the game.

Nike kitted out more teams for the first time in Brazil in 2014, but Adidas has fought back, this year sponsoring 12 of the 32 participating teams including strong contenders such as Germany and Spain, along with hosts Russia.

According to Chan, who takes into account the current odds, Adidas has a 52 percent chance of having a team it sponsors win.

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